UCATT says the Government's auto-enrolment pension scheme has major flaws

Construction union UCATT is calling on the Government to address the damaging flaws in its much trumpeted auto-enrolment pension scheme, as part of a review announced this week. Currently, thousands of construction workers are being cheated out of a proper pension by glaringly obvious omissions.
 
Firstly, thousands of construction workers are agency workers who change jobs frequently and the auto-enrolment scheme only clicks in 3 months after starting a new job. This means construction workers – who change jobs frequently - have huge holes in their contributions
 
Secondly, construction workers being paid by umbrella companies will end up paying out more than half their wages in tax, national insurance and pensions contributions.
 
Construction workers working for an umbrella company are forced to pay both employees (12%) and employers (13.8%) national insurance contributions. Combine this with the current 2% contribution to the auto-enrolment pension scheme and 20% income tax and thousands of construction workers will be paying out 47.8% of their wages. 
 
From April 2019 the auto-enrolment contribution goes up to 8%, making umbrella workers deductions from wages a whopping 53.8% - and that doesn’t even include the other minor deductions taken out by umbrella companies.
 
UCATT Acting General Secretary, Brian Rye, said: “The success of the auto-enrolment pension scheme is not shared by the construction workers of the UK. In order for this scheme to become a true flagship policy the Government review must listen to the voice of construction workers.”
 
Mr Rye added: “We welcome the success of the auto-enrolment pension scheme and we welcome the Government review into its implementation – but equally we want all construction workers to be able to share in its success and save towards a secure pension and comfortable retirement. We will be engaging with Government during this review in order to get parity for our members. It’s only fair.”
 
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